1963 (4) TMI 75 - SC - Indian Laws

Supreme Court upholds Tribunal's decision on insurer's compensation appeal

The Supreme Court dismissed the appeal, upholding the Tribunal's findings that the insurer's direct approach for reassessment of compensation was ... Right of insurer to move the Tribunal directly under s.16(2) - reference to the Tribunal must be made by the Corporation - interpretation of Rule 12 of the Rules and its proviso - incompetency of proceedings commenced directly by insurer - condonation of delay under the proviso to Rule 12Right of insurer to move the Tribunal directly under s.16(2) - reference to the Tribunal must be made by the Corporation - The entitlement and procedure for referring disputes under s.16(2) - whether an insurer may directly approach the Tribunal or the reference must be made through the Corporation. - HELD THAT: - The Court held that under s.16(2) of the Act an insurer does not possess a direct right to move the Tribunal. The statutory language and the scheme of the Act show that the insurer can only 'have the matter referred to the Tribunal' by moving the Corporation, and the Corporation is the proper authority to make the reference. Although sub-s.2 does not expressly name the Corporation, the context and the distribution of duties under the Act make the Corporation the only entity competent to refer the dispute to the Tribunal. Consequently proceedings initiated by the insurer direct to the Tribunal were misconceived and incompetent from the outset.An insurer cannot directly approach the Tribunal under s.16(2); the reference must be made by the Corporation.Interpretation of Rule 12 of the Rules and its proviso - condonation of delay under the proviso to Rule 12 - Construction and scope of Rule 12 - whether Rule 12 prescribes the period within which an insurer must move the Corporation and whether the proviso to Rule 12 permits condonation by the Tribunal of delay in such cases. - HELD THAT: - The Court examined r.12 and concluded that the rule as framed does not cure the absence of a prescription of the period within which an insurer must move the Corporation under s.16(2). The specific duty to prescribe that period lies on the Central Government under s.16(2), exercised via its rule-making power. Reading r.12 as prescribing the insurer's period by implication (so that the insurer could move the Corporation on the last day and the Corporation make a reference the same day) would be impractical. The proviso to r.12, which permits the Tribunal to admit a reference after the prescribed period if 'the person making the reference' shows sufficient cause, indicates that r.12 was intended to govern references made by persons other than the Corporation (i.e., insurers or agents). The proviso cannot be sensibly read to apply to the Corporation, and it cannot be used to rewrite the rule to supply the statutory prescription that s.16(2) requires. Because the insurer had no right to move the Tribunal, questions of condonation under r.12 did not afford relief in the present proceedings.Rule 12 does not displace the statutory requirement that the Central Government prescribe the period within which an insurer must move the Corporation under s.16(2); the proviso to r.12 does not validate a direct reference by an insurer to the Tribunal in the absence of such a prescription.Incompetency of proceedings commenced directly by insurer - effect of incompetency of proceedings - Consequences of the insurer having directly instituted proceedings before the Tribunal contrary to the statutory scheme. - HELD THAT: - Because the insurer lacked any statutory right to institute proceedings before the Tribunal, the proceedings before the Tribunal were incompetent and wholly misconceived. Incompetency from the beginning meant that the Tribunal could not grant relief and that any inquiry into limitation or condonation of delay in those proceedings was unnecessary and irrelevant. The Court therefore quashed the Tribunal proceedings. The appellant remains free to apply to the Corporation under s.16(2) once the Central Government prescribes the period required by s.16(2).Proceedings instituted directly by the insurer before the Tribunal were incompetent and are quashed; no relief can be granted in those proceedings.Final Conclusion: The appeal is dismissed. The Court held that s.16(2) contemplates references to the Tribunal only by the Corporation (not by the insurer directly); Rule 12 does not supply the statutory prescription required by s.16(2) nor validate a direct reference by the insurer; the Tribunal proceedings were incompetent and are quashed, and the appellant may move the Corporation under s.16(2) when the requisite period is prescribed. Issues Involved:1. Whether the insurer had the right to directly approach the Tribunal for reassessment of compensation.2. Whether the insurer's claim was barred by time.3. Whether the Tribunal was correct in refusing to extend the time for making the application.Issue-wise Detailed Analysis:1. Right to Approach the Tribunal Directly:The primary issue was whether the insurer could directly approach the Tribunal for reassessment of compensation. According to Section 16(2) of the Life Insurance Corporation Act, 1956, the insurer must move the Corporation to make a reference of the dispute to the Tribunal. The court emphasized that the insurer has no right under the section to approach the Tribunal directly. The procedure mandated that the insurer had to move the Corporation, which would then refer the dispute to the Tribunal. The insurer's direct approach to the Tribunal was deemed wholly misconceived, rendering the proceedings incompetent from the beginning. Consequently, neither the Tribunal nor the Court could grant any relief to the insurer or its successor-in-interest.2. Claim Barred by Time:The Tribunal held that the insurer's claim was barred by time, as it did not lodge a claim within the prescribed three months from the date on which the compensation was offered by the Corporation. Rule 12 of the Rules framed under the Act stipulates that a reference to the Tribunal must be made within three months from the date the compensation is offered. The insurer failed to act within this period, and the Tribunal found no sufficient cause to extend the time. The Supreme Court concurred with this view, stating that the insurer did not show any cause for the delay. The Tribunal's decision to dismiss the claim on the grounds of limitation was upheld.3. Refusal to Extend Time:The insurer had requested the Tribunal to extend the time for making the application. However, since the insurer had no right to move the Tribunal directly, the question of extending time did not arise. Even if the application for extension of time was considered competent under the proviso to Rule 12, the Tribunal found no sufficient cause to justify the delay. The Supreme Court agreed, noting that there was no justification to interfere with the Tribunal's order on this matter. The appeal, therefore, failed on this ground as well.Conclusion:The Supreme Court dismissed the appeal, concluding that the insurer's proceedings were incompetent from the start due to the incorrect procedure followed. The Tribunal's findings on the issues of direct approach, time-bar, and refusal to extend time were upheld. The insurer or its successor-in-interest was advised to move the Corporation for making a reference after the period for doing so is prescribed by the Central Government. No costs were awarded to the Corporation as it had not raised the point of incompetency before the Tribunal or in its statement of case in the appeal.Additional Judgment:The judgment delivered by Mudholkar, J., also emphasized that the insurer must move the Corporation for making a reference to the Tribunal. He highlighted that the Central Government had not prescribed the period within which the insurer must move the Corporation, as required by Section 16(2) of the Act. The rule-making authority's oversight in framing Rule 12 led to a lacuna, resulting in the proceedings before the Tribunal being quashed. Mudholkar, J., reiterated that the insurer could move the Corporation once the period is prescribed.Final Order:Appeal dismissed. Proceedings before the Tribunal quashed. No order as to costs.